Forex Market Commentaries - Supplemental Nutrition Assistance Program (SNAP)

Forty Six Million Americans Just Can't SNAP Out Of It

Feb 8 • Market Commentaries • 4212 Views • Comments Off on Forty Six Million Americans Just Can't SNAP Out Of It

The Supplemental Nutrition Assistance Program (SNAP) provides financial assistance for food purchasing to low and no income people and families living in the U.S. It is a federal aid program administered by the Food and Nutrition Service of the U.S. Department of Agriculture, but benefits are distributed by the individual U.S. states. It is historically and commonly known as the “Food Stamp Program”.

In the 2010 fiscal year, $65 billion in food stamps were distributed, with an average benefit per recipient in a household of $133 per month. As of October 2011, 46,224,722 Americans were receiving food stamps. In Washington, D.C., and Mississippi, more than one-fifth of residents receive food stamps. Recipients must have at most near-poverty incomes to qualify for benefits.

Since June 2004, all states have used Electronic Benefit Transfer (debit card) for all food-stamp benefits. For most of its history, however, the program actually used paper-denominated stamps or coupons worth US$1 (brown), $5 (blue), and $10 (green). These stamps could be used to purchase any prepackaged edible foods regardless of nutritional value (for example soft drinks and confectionery could be purchased on food stamps).

In the late 1990s, the food-stamp program was revamped and actual stamps were phased out in favour of a specialised debit-card system known as Electronic Benefit Transfer (EBT) provided by private contractors. Many states merged the use of the EBT card for public-assistance welfare programs as well. The 2008 farm bill renamed the Food Stamp Program as the Supplemental Nutrition Assistance Program (as of October 2008), and replaced all references to “stamp” or “coupon” in federal law to “card” or “EBT.”

The humiliation, for many of the 46 million adults who are in receipt of the USA food stamp programme, must be excruciating. Many will have children to care for and in a population of circa 312 million circa 15% of the population are in receipt of this benefit. The SNAP programme has been high on the news agenda in the USA recently due to two issues, firstly in certain parts of America the inbound call centres can’t cope with enquiry levels and secondly there is the stirrings of a political and administration movement to move those in receipt of stamps away from the purchase of what could be classed as ‘junk food’ items.

Food Stamp Phone Line Drops 350,000 Calls A Month
Five out of every six calls to the San Diego County phone network, designed to help people apply for food stamps and other benefits, don’t get through. Those that do face an average wait of over 30 minutes. More than 350,000 calls a month don’t get answered because the county Health and Human Services Agency hasn’t hired enough workers or installed enough phone lines. The system picks up about 68,000 calls per month.

Florida: State Lawmakers Could Vote To Keep People From Using Food Stamps To Buy Junk Food
State lawmakers could vote to keep people from using food stamps to buy junk food. A bill to add candy, Coke and cookies to the list of items food stamps won’t cover has passed a senate committee.

State Senator Ronda Storms is Sponsoring legislation that would add junk food to the list of items not covered by the entitlement benefit;

In these times when we are making all these cuts at the state level, the local level, the federal government. We are cutting back everywhere. Really, is it a high priority for us to buy people potato chips?

Representative Mark Pafford calls the bill heavy handed;

It’s certainly government going way too far in private family matters.


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Last year three million Floridians claimed five billion dollars in food stamps, the bill could face a lot of opposition as it goes through the process. Jello, Ice cream, pretzels, popcorn, popsicles, potato chips, donuts and cupcakes are just a few of the items that would be banned. But the junk food element of the bill may have to be eliminated in order to garner support to pass the measure.

In the richest country on the planet it defies belief that circa fifteen percent of the population would go hungry without government assistance. Not getting the assistance initially, due to poor call centre handling, doesn’t quite ring true in such a technically advanced society were an army of home workers could assist with the applications. This failure suggests that a deliberate policy of denial through exhaustion has been put in place.

However, the second issue is actually quite alarming, if a government provides nutritional benefits should it have (as of right) the ability to state what that benefit must be spent on? Surely a fair minded society would expect the purchase of alcohol to be prohibited, but does a govt have the right to micro manage that choice down to a banned list of food items? The American poor on SNAP can’t cook up a three course meal using the best value ingredients, they may not have access to cooking facilities, or fuel, or constant running water. And if you think that reads like a third world description and not the mighty USA then think again.

Over ten million Americans cannot afford to heat their homes without assistance, therefore the cliche that “they’re just buying pizza and fries with this handout” doesn’t quite wash. The poor are driven to buy the cheapest most convenient food available, a wholesome, three course, home cooked meal each evening is dreamland for many.

This latest tinkering on the SNAP programme is beyond frugality, this is now is entering into a phenomena with a far more chilling end game, the name of this phenomena also begins with the letter “F”.

There is no suitable phrase to explain or understand why governments become far harsher on the poorer elements of society during times of economic hardship, but unfortunately it’s a well worn tactic and well trodden path. Whilst our banking fraternity parks trillion in off shore socially useless investments the poor in the USA, Europe and the UK, become poorer and hungrier and a target of victimisation.

It’s as if the governments of the day want to divide their populous and encourage them to finger point and apportion blame away from the culprits who took a wrecking ball to the financial system.

The reasons are as old as politics and sadly this disturbing pathology works… for those in power…

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